The standard deviation of the returns of Stock A is 45.9 percent, and the standa

Question

The standard deviation of the returns of Stock A is 45.9 percent, and the standard deviation of the returns of Stock B is 52.7 percent. Which of the following statements about the stocks is correct? View Favorikes Tools Help DTAP 1-8) l Exam (Ch. 1-8) A nt Sam 000% 0:57:13 Save The standard deviation of the returns of Stock A is 45.9 percent, and the standard deviation of the retums of Sock B is 52.7 percent Which of the following statements about the socks is cerrect? ?a.Stock B has at ghter probability distribution than Stock A, and hence lower total risk. O b. Stock A has a tighter probability distribution than Stock B, and hence lower total risk. O c.Stock A has a wider (more dispersed) probability distribution than Stock B, and bitce lower total risk O d Stock B has a lower risk than Stock A, but nothing can be said about their prohability distributions O e Stock B has a wider (more dispersed) probability distribution than Stock A, and hence lower total risk

Explanation / Answer

C. Stock A has a wider (more dispersed) probability distribution than Stock B , and hence lower total risk.

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